By Kyle Chezum Updated on 10/25/2010

As banks suffer from buybacks and litigation over improper paperwork filed in foreclosure cases, bad loans may begin to stack up on bank balance sheets.  This will likely slow lending rates at most banks caught in the foreclosure mess, which could lead to a mortgage availability crisis.  The borrowers who have defaulted on these bad loans won't face eviction until paperwork issues have been cleared up, which may keep things slow in the real estate industry as a whole.

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